Buyout firm Advent International has acquired snacks maker DFM Foods from its founders and sponsor WestBridge Capital Partners. Advent will acquire up to 34.1 million shares representing up to 68% of the company’s stake for a total consideration of ₹8.5 billion (US$118 million).
J Sagar Associates was the adviser to Advent. The firm’s team comprised partners Vikram Raghani and Anand Lakra and associates Ami Shah and Khamir Kamdar. AZB & Partners was the adviser to DFM Foods. The AZB team included partners Gautam Saha, Sachin Mehta, and Dushyant Bagga, and senior associates Harshit Chandra and Punita Gupta.
The stake acquisition will trigger a mandatory open offer, in accordance with the Securities and Exchange Board of India’s regulations governing takeovers. The buyer will make an offer for an additional 26% of the company’s shares at a price of ₹249.50 apiece. If the tender offer is fully subscribed, Advent will acquire 94% of the company and will take the total deal size to ₹9.4 billion.
Private equity firm WestBridge had bought into DFM Foods in 2014, when it picked up a 25% stake in the listed company for ₹650 million at ₹259 per share. The founders own a 38.27% stake in the snack maker as of September this year, while WestBridge owns 25%.
DFM Foods was set up in 1983 as Delhi Floor Mills by R P Jain, and manufactures ready-to-eat packaged snacks. ICICI Securities was the financial adviser to Advent and is also advising on the open offer, while KPMG was the exclusive financial adviser to DFM Foods.